False Advertising and Unfair Competition Law

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False advertising
False advertising or deceptive advertising is the use of false or misleading statements in advertising. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, many governments around the world use regulations to control false, deceptive or misleading advertising. False advertising, in the most blatant of contexts, is illegal in most countries. However, advertisers still find ways to deceive consumers in ways that are legal, or technically illegal but unenforceable.

Contents [hide]
1 Pricing-based methods
1.1 Hidden fees and surcharges
1.2 "Going out of business" sales
1.3 Misuse of the word "free"
2 Other deceptive methods
2.1 Manipulation of measurement units and standards
2.2 Fillers and oversized packaging
2.3 Manipulation of terms
2.4 Incomplete comparison
2.5 Inconsistent comparison
2.6 Misleading illustrations
2.7 False coloring
2.8 Angel dusting
2.9 Bait-and-switch
2.10 Guarantee without a remedy specified
2.11 "No risk"
2.12 Acceptance by default
2.13 Undisclosed dishonest business practices
3 Regulation and enforcement
3.1 United States advertising regulations
3.2 State advertising regulation
3.3 California advertising regulation
3.3.1 History of the UCL
3.3.2 Section 17200 standing to sue
3.3.3 Overview of the UCL
3.3.4 Elements of a false advertising claim
3.3.5 Relationship between section 17200 and other California consumer protection statutes 3.3.6 Exemptions and defenses
3.3.7 Remedies available under the UCL
4 See also
5 External links
6 References
[edit]Pricing-based methods

[edit]Hidden fees and surcharges
Service providers often tack on the fees and surcharges that are not disclosed to the customer in the advertised price. One of the most common is for activation of services such as mobile phones, but is also common in broadband, telephony, gym memberships, and air travel. In most cases, the fees are hidden in fine print, though in a few cases they are so confused and obfuscated by ambiguous terminology that they are essentially undisclosed. Hidden fees are frequently used in airline and air travel advertising.[1] In the case of motor vehicles, hidden charges may include taxes, registration fees, freight, pre-delivery inspection (PDI), licenses, insurance or other costs associated with getting a vehicle on the road.[2] Airlines and car manufacturers hire firms that disadvantage customers through:[3]

Unfair contract terms, notably with respect to consumer compensation. Use customer data for purposes other than they were obtained for. Apply unfair fees, charges and penalties on transactions.
Place artificial restrictions on the time period during which customers can submit claims. For delivered items in the US, the amount of shipping and handling fees is typically not disclosed (although the fact that there will be such charges is disclosed). The deceptive part is that they will often claim an item is "free", when, in fact, the S&H charges enable them to make a tidy profit.

[edit]"Going out of business" sales
In many cases, liquidators hired to sell merchandise from a closing store will actually raise the prices on items that were already marked-down on clearance. For items already marked down, this means the liquidator increases the price and then "discounts" it from there. Also common is for the sale prices at a retail chain's other stores to be lower than the liquidator's prices at the closing stores. Both of these proved to be the case in November 2008, with the same liquidator (Hilco) committing both offenses: the markups at Linens 'n Things, and the higher prices on around one-third of the items compared to other Circuit City stores remaining open. Additionally, liquidators refuse to accept returns, so if a customer notices being overcharged, there is no apparent recourse.[4] This is used by most advertisers trying to prove the acceptability of their products....
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